A business case is a structured evaluation of a proposed decision, providing a transparent decision-making trail and evaluating the merits of the choices considered. Typically business cases are submitted for review to senior managers and seek to distil complex issues and to provide rational choices between competing alternatives. As an example, business cases are often prepared to consider the investment of money in equipment or new projects and would include a statement of the proposed goals, exploration of alternative options, some form of cost benefit analysis, a risk analysis, recommendations for the preferred options and, an implementation plan. The procurement contribution to business cases may include validating the ‘do or contract’ decision, ensuring that the proposed benefits are realistic, aligning any contractual arrangements so that risk is shared with the contractors, assessing the commercial risks, ensuring that the total cost of the project is costed, not just the initial purchase price, and of course negotiating terms with any contractor in order to try to maximise the return on investment. See also Return on Investment.
Project Management e-Learning courses are available at Academy of Procurement.« Back to Glossary Index